[at-fates-hands]

"Lesson learned: always test higher prices. I didn’t bother with the setup required to run simultaneous A/B tests. I just raised prices and watched what happened."

Not enough startups do this on a regular basis. They're too worried about losing clients. If you don't reinforce your value proposition on a regular basis by adding features, you will lose customer regardless.

With several of my side projects, I would add a new feature, then raise prices for new customers. At the same time, clients who renewed (I used a subscription based model) would get a discount. It was like magic. More people wanted in earlier, instead of waiting for a more mature, more expensive product. They gladly paid a lower monthly fee up front, in order to avoid the increase in price later on.

[TTringas]

It's a great point. I struggled with how explicit to be about this. E.g. - do you email all the early adopters and tell them how lucky they are they are on a lower plan? Does that comes across as too sleezy? How do you translate this into NEW users? Do you put above the "sign up" button "Buy now before prices increase!"?

Maybe it could be added to the monthly receipts, showing the current price for new users minus their "discount"...

But yea, raise prices.

[kevinconroy]

Several easy ways to do this.

First, you could send an email to existing customers telling them that you are raising prices but that you are grandfathering them in and their rate won't change. Danger here is that you then go on record and may never want/be able to raise prices without losing them. YMMV.

Second, change their monthly invoices to show that they WOULD be charged a higher rate if they weren't grandfathered in. Loyalty discount. If you don't want to show a discount on the invoice, just rename their pricing tier to "Loyal Customer - Pro Edition" (or whatever). This lets you do it stealth and leaves options open for price changes in the future.

[at-fates-hands]

>> First, you could send an email to existing customers telling them that you are raising prices but that you are grandfathering them in and their rate won't change.

This is the approach I took, but worded similar to how cable companies word their advertising - that the discount is only valid for x amount of months. After that period, they could be subject to a "change" in price. The wording is left vague so you don't say there will be an increase, simply that the rate could change after their discount expires.

This was usually after a 12-24 month period. After two years of discounts, I finally increased the monthly fee, but only by about 8% which still left them paying less than new customers - which is an important point. Yes, they're paying more than they did, but it's still less than new subscribers, giving them the impression they're still paying less - when in reality, I'm just making back the discount I was giving them.